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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
MARCH 2, 1999
GENZYME CORPORATION
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 0-14680 06-1047163
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
ONE KENDALL SQUARE, CAMBRIDGE, MASSACHUSETTS 02139
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code:
(617) 252-7500
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ITEM 5. OTHER EVENTS.
On March 2, 1999, the Board of Directors of Genzyme Corporation
("Genzyme") adopted a new Shareholder Rights Plan (the "Rights Plan") to become
effective on March 28, 1999, the date on which the previous rights plan expires.
Under the new Rights Plan, one Stock Purchase Right (a "Right") will be
distributed as a dividend on each outstanding share of Genzyme's General
Division Common Stock, par value $.01 per share (the "GENZ Stock"), its Tissue
Repair Division Common Stock, par value $.01 per share (the "GZTR Stock"), and
its Molecular Oncology Division Common Stock, par value $.01 per share (the
"GZMO Stock") (all such series of Genzyme's Common Stock being referred to
herein, collectively, as the "Common Stock"). The dividend distribution will be
made on March 28, 1999 (the "Record Date"), payable to shareholders of record on
that date; also on the Record Date, rights issued and outstanding under the
previous rights plan with will expire. Each Right will, upon becoming
exercisable, entitle the holder to buy one newly-issued share of Genzyme's (i)
Series A Junior Participating Preferred Stock, par value $.01 per share, for
each share of GENZ Stock, at an exercise price of $300, (ii) Series B Junior
Participating Preferred Stock, par value $.01 per share, for each share of GZTR
Stock, at an exercise price of $26 and (iii) Series C Junior Participating
Preferred Stock, par value $0.01 per share, for each share of GZMO Stock, at an
exercise price of $26 (all such series of Junior Participating Preferred Stock
being referred to herein, collectively, as "Preferred Stock," and each series'
exercise price being referred to herein, as its "Purchase Price"). The
description and terms of the Rights are set forth in an Agreement (the
"Agreement"), dated as of March 16, 1999, between Genzyme and American Stock
Transfer & Trust Company, as rights agent.
The new Rights will be evidenced, with respect to any certificate of
any series of Common Stock outstanding as of the Record Date, by those Common
Stock certificates and no separate certificates for the Rights will be issued.
The Rights will only be transferable with the Common Stock, and a transfer of
Common Stock will also constitute a transfer of the corresponding Rights.
Genzyme will mail separate certificates for the Rights ("Right
Certificates") upon the earlier of (i) the tenth day (or such later date as the
Board may determine) following Genzyme's public announcement that a person or
group has acquired 15% or more of the combined voting power of all series of
Genzyme's outstanding Common Stock (such person or group being hereinafter
referred to as an "Acquiring Person") or (ii) the tenth business day (or such
later date as the Board may determine) after any person or group commences a
tender or exchange offer which would, if completed, result in the offeror owning
15% or more of the combined voting power of all series of Genzyme's outstanding
Common Stock. The earlier of the dates described in (i) and (ii) above is called
the "Distribution Date." The Rights cannot be exercised until the Distribution
Date. Until a Right is exercised, holding a Right will not confer rights as a
stockholder of Genzyme, such as the right to vote or to receive dividends. The
Rights will expire on March 28, 2009.
The Rights may generally be redeemed by action of the Board of
Directors at $0.001 per Right at any time prior to the tenth day (or such
later date as the Board may determine) following Genzyme's public announcement
that an Acquiring Person has become such. The Rights may also be redeemed,
following the above-cited public announcement, in connection with certain
mergers and other transactions between Genzyme and a person who is not an
Acquiring Person.
Preferred Stock purchasable upon exercise of the Rights will not be
redeemable. Each share of Preferred Stock will be entitled to a minimum
preferential quarterly dividend payment of $1 per share, but will be entitled to
an aggregate dividend of 100 times the dividend declared per share of the
corresponding series of Common Stock. In the event of liquidation, the holders
of the Preferred Stock will be entitled to an aggregate payment of 100 times the
payment made
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per share of the corresponding series of Common Stock. Each share of Preferred
Stock will have 100 votes, and will vote together with the Common Stock. In the
event of any merger, consolidation or other transaction in which Common Stock is
exchanged, each share of Preferred Stock will be entitled to receive 100 times
the amount received per share of the corresponding series of Common Stock.
The value of the one one-hundredth interest in a share of Preferred
Stock purchasable upon exercise of each Right should approximate the value of
one share of the corresponding series of Common Stock because of the nature of
the Preferred Stocks' dividend, liquidation and voting rights.
To preserve the economic value of the Rights, in the event of any stock
dividends, stock splits, recapitalizations, reclassifications or other similar
changes in capitalization, then the number of Preferred Shares (or the number
and kind of other securities) issuable upon exercise of each Right, the Purchase
Price and redemption price in effect at such time (including the number of
rights or fractional Rights associated with each share of Common Stock) shall be
adjusted as deemed appropriate by the Board. With certain exceptions, no
adjustment in the Purchase Price will be required until cumulative adjustments
require an adjustment of at least 1% in the Purchase Price. No fractional shares
of Preferred Stock will be issued (other than fractions which are integral
multiples of one one-hundredth of a share of Preferred Stock); instead, an
adjustment in cash will be made based on the average closing price of the
Preferred Stock (or if not ascertainable, the market price of the underlying
Common Stock) over the last ten trading days before the date of exercise.
Upon an Acquiring Person becoming such, each holder of Rights, other
than an Acquiring Person, will thereafter have the right to purchase a number of
shares of a series of Genzyme's Common Stock having a value equal to two times
the exercise price of the corresponding Right. Genzyme also has the right, in
such circumstances, to mandatorily exchange the Rights for such shares of Common
Stock.
Alternatively, if Genzyme is involved in a merger or other business
combination in which Genzyme is not the surviving corporation at any time when
any person owns 15% or more of the voting power of Genzyme's outstanding Common
Stock, the Rights will entitle a holder to buy shares of common stock of the
acquiring company having a market value of two times the Purchase Price of each
Right.
Prior to the Distribution Date, the Board of Directors may amend any
terms of the Rights without the consent of certificates representing Common
Shares, including holders of the Rights. From and after the Distribution Date,
the Rights Plan may be amended without the approval of any holders of Rights
only to (i) cure ambiguities, (ii) correct defective provisions, (iii) extend
the redemption period for the rights, or (iv) change provisions as the Board
deems necessary, but that will not adversely affect the interests of holders of
the Rights. Under no circumstances, however, can the Rights Plan be amended to
extend the redemption period after that period has expired.
The Rights have certain anti-takeover effects. The Rights can cause
substantial dilution to a person or group that attempts to acquire Genzyme on
terms that are not approved by the Board of Directors. The Rights should not
interfere with any merger or other business combination that is approved by the
Board of Directors because the Rights may be redeemed by Genzyme prior to the
time that the Rights have become exercisable.
The Agreement specifying the terms of the Rights, which includes as an
exhibit the Certificate of Designations setting forth the terms of the Preferred
Stock, is attached to this report as an exhibit and is
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incorporated herein by reference. The foregoing description of the Rights is
qualified in its entirety by reference to this exhibit.
ITEM 7. EXHIBITS.
Number Description
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4 Renewed Rights Agreement, dated as of March 16, 1999, by
and between Genzyme Corporation and American Stock
Transfer & Trust Company.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: March 17, 1999 GENZYME CORPORATION
By: /s/ David J. McLachlan
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David J. McLachlan
Executive Vice President, Finance
and Chief Financial Officer
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EXHIBIT INDEX
Number Description
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4 Renewed Rights Agreement, dated as of March 16, 1999, by and between
Genzyme Corporation and American Stock Transfer & Trust Company.
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